This excerpt taken from the PDA 6-K filed May 20, 2008.
Message from the Management
The year 2007 will certainly go down in Perdigãos corporate history as one in which we made significant progress in our commitment of creating shareholder value. During the period we focused our efforts on building up a solid base for establishing the largest food company in Brazil and one of the countrys leading exporters. We were also successful in moving towards achieving the goals in our growth plan through 2011 and assuring the effective sustainability of the Companys businesses.
We reinforced our processes together with Company expansion and some well-chosen acquisitions. We focused our strategy on enhancing return on equity with a reduction of risks, improved productivity, diversification of the supply, production, and sales chains, distribution channels, markets and customers, including a differentiated mix of products of high standard, quality foods for consumers worldwide.
The negotiations to acquire Eleva were among the Companys landmark events for the year. The underlying rationale for this acquisition was the complementary nature of our respective businesses Eleva operating principally in the meats and dairy-processed products areas as well as the implementation of the Companys growth plan and strategy. Thanks to a well-structured operation for incorporating the businesses, we absorbed Elevas operations in February 2008, settlement being partially in cash and partially in shares, with the same rights being extended to all the acquired companys shareholders.
Yet another important development in the dairy-processed product area was the acquisition of the remaining capital of Batávia, of which we already held 51%. We also took advantage of the opportunity to purchase the Doriana, Claybon and Delicata brands, in addition to a strategic alliance with Unilever to manage the Becel and Becel ProActiv brands. These operations have allowed us to set up a sold business in the margarine segment providing an advanced bridgehead from which we can compete effectively in this market. In addition, we acquired the beef processing unit in the state of Mato Grosso, as well as expanding already consolidated businesses in poultry, pork meat, dairy and processed products through increased production capacity.
We also acquired Plusfood, a European processed meats concern as part of our ongoing internationalization. With the objective of ramping up business activity in emerging markets within Brazil, we announced the construction of the Bom Conselho agroindustrial complex in the state of Pernambuco: this will comprise two industrial units one for the production of dairy-processed products and the other for specialty meats and a distribution center which will be dedicated first and foremost to supplying the Northeast. This new project represents a further significant contribution in the growth cycle envisaged for the period through 2011.
All these initiatives were combined with investment in expansion and in already consolidated segments at Perdigão, particularly the increase in output of poultry, pork meats and processed products. During the year, we concluded expansion projects at the Rio Verde (GO) and Capinzal (SC) units and unveiled the new agroindustrial complex at Mineiros in the state of Goiás.
We restructured our administrative organization into Business Units to more effectively assist the process of absorbing the operations already envisaged in our strategic plan. Special emphasis was also placed on training new leaders through the upgrading of skills to meet the demands arising from the new challenges facing the Company.
Again, with the purpose of facilitating growth, operational systems were unified allowing us to create a base capable of receiving and integrating information supplied by the recently acquired companies. We also approved the expansion of our supply chain to support new business volumes and the dynamism of future operations.
At the end of 2007, the Company concluded another primary share offering in support of the Eleva acquisition, culminating in the issue of 20.7 million of new shares. This successful deal resulted in the raising additional funding of R$934 million, largely dedicated to the settlement of the Eleva acquisition.
Over the past 13 years, we have grown at an annual pace of more than 14%, significantly increasing our market share all this allied to a major increase in our share liquidity. In 2007, volume was a record, totaling an average of US$18.6 million/day of shares traded on the Bovespa and the NYSE, corresponding to a growth of 120.8% over the preceding year.
With these results, Perdigão closes 2007 with a virtuous growth cycle, which will continue into to 2008. For, besides consolidating all the initiatives taken during the year, we shall continue to grow at the same pace as the last decade, renewing our commitment of creating value for shareholders and investors.
Following a transition period that is expected to last for up to six months, in April 2008 a new Chief Executive Officer of the Company will be appointed in line with the policy of planning and transparency that has made Perdigão what it is today. We are convinced that this transition will be a seamless one with no unforeseen events, above all because the greatest strength of Perdigão lies in the commitment of its professionals, responsible for the Companys current standing, and who will certainly be instrumental in its further progress over the coming years. Once the transition phase has elapsed the functions of Chief Executive Officer and Chairman of the Board will be exercised independently, as has always been the case.
The year was an incomparable one in the development of Perdigãos business. We would never have achieved such success had it not been for the confidence of our investors, always present at the moment when critical decisions have had to be taken during our corporate history. Again, these advances reflect the ever-present determination and persistence of our entire team. We take this opportunity of also thanking all our stakeholders, an integral part of our success and who support us in this evolution.